Google Wallet, which Google first announced this past spring, utilizes near-field communications (NFC) technology to send very short-range signals to nearby NFC tags to complete payments -- or as Google tells it, you'll only have to tap your smartphone on a store's credit card processor and you're good to go. For now the application will only be available to use on the Sprint network with the Nexus S 4G device, although Google says the app should come to other Android-based devices on other wireless networks in the near future.

In its initial incarnation, Google Wallet lets you pay for merchandise using either a Citi MasterCard or a Google Prepaid Card that Google says "can be funded with any of your existing plastic credit cards." Google is giving users a $10 bonus if they set up their own Google Prepaid Card by the end of the year. During its initial announcement of Google Wallet, Google said that it had lined up 15 big-name merchants that have embedded Google Wallet NFC capabilities onto their stores' credit card processors, including RadioShack, American Eagle Outfitters, Subway, Macy's, Foot Locker and Walgreens.

From a security standpoint, Google is emphasizing three of the application's key features that will help you keep your virtual wallet secure. The first is a simple PIN that Google says you'll need to enter before making any purchase; or put another way, the same basic security measure that you enact every time you pay with your debit card. Google has also created a separate chip for its Wallet called Secure Element that stores encrypted credit card data and that is separate from your smartphones memory and that the company says will "self-destruct" if anyone tampers with it. And finally, Google is also using MasterCard's PayPass technology to encrypt your credit card information as it's being sent from your phone to an NFC tag.

NFC payments have become a hot feature on smartphones ever since Google first enabled NFC technology on its Android operating system when it released its Android 2.3 ("Gingerbread") update last year. Online payment company PayPal has also developed an NFC-based mobile payment application that runs on the Google Nexus S smartphone.